KLCI Stock - SPSETIA / 8664 - 2010 Quarter 4

Company Info

Market Capital (Capital Size)	6,450,040,958 (Very Large)
Par Value	RM 0.75

My Analysis

Forecast P/E now	(6.34-0.2)/0.22 = 27.91 (High)
Target Price	4.62+0.2 = 4.82 (PE 21.0, EPS 0.22, DPS 0.2)
Decision	NOT BUY unless core business profit increase more instead of investment gain
Comment	Revenue third consecutive quarter increasing and is historical highest, eps second consecutive quarter increasing and is highest since FY08Q1, but if exclude investment gain then actually lower than preceding quarter and higher than preceding year corresponding quarter, free cash flow decreased and negative net cash flow increased, liquidity increasing at moderate level now, gearing ratio increased at above moderate level now, inventory period decreasing and other accounting period as usual, property development segment profit largely increased but half of it offset by the rest of the segments
First Support Price	6.3
Second Support Price	5.5
Risk Rating	MODERATE

Research House

HwangDBS Target Price	7.7 (2011-01-13)
RHB Target Price	8.05 (2011-01-17)
CIMB Target Price	8.06 (2011-01-18)
ECM Target Price	6 (2011-01-18)
Maybank Target Price	7.15 (2011-01-18)
MIDF Target Price	6 (2011-01-18)
TA Target Price	6.95 (2011-01-18)
AMMB Target Price	7.1 (2011-01-19)
OSK Target Price	7.23 (2011-01-27)

Accounting Ratio

Return on Equity	11.50%
Dividend Yield	3.15%
Profit Margin	18.17%
Tax Rate	25.86%
Asset Turnover	0.398
Net Asset Value Per Share	2.11
Net Tangible Asset per share	2.11
Price/Net Tangible Asset Per Share	2.64
Cash Per Share	1.01
Liquidity Current Ratio	2.304
Liquidity Quick Ratio	1.5704
Liquidity Cash Ratio	0.8986
Gearing Debt to Equity Ratio	1.0034
Gearing Debt to Asset Ratio	0.5008
Working capital per thousand Ringgit sale	88.0%
Days to sell the inventory	217
Days to collect the receivables	158
Days to pay the payables	134

My notes based on 2010 quarter 4 report (number in '000):-
- The Group reported a profit after taxation of RM75.2 million for Q4 2010, which is 32% higher than RM56.9 million reported for Q4 2009. The higher profit includes gain from the disposal of Tesco Hypermarket in Bukit Indah Johor, an Investment Property of the Group

- The Group’s current quarter profit before taxation is RM101.4 million, which is RM4.8 million lower than the preceding quarter ended 31 July 2010. This was due to higher profit recognised on the disposal of an Investment Property by the Group in Setia Alam in the preceding quarter

- Estimate next 4Q eps after 2010 Q4 result announced = 0.05*4*1.1 = 0.22(assume investment gain only RM6 million), estimate PE on current price 6.34 = 27.91(DPS 0.2)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0439(after exclude RM48 million other income and used 27% VAT)*4*1.1 = 0.1932, estimate highest/lowest PE = 28.47/22.31 (DPS 0.15)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1841 (10% increase from 0.1674), estimate highest/lowest PE = 24.06/20.53 (DPS 0.15)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.1724 (3% increase from 0.1674), estimate highest/lowest PE = 24.01/20.19 (DPS 0.14)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.16, estimate highest/lowest PE = 26.25/21.5 (DPS 0.14)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.16, estimate highest/lowest PE = 27.63/21 (DPS 0.15)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.16, estimate highest/lowest PE = 28.56/22.81 (DPS 0.15)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.16, estimate highest/lowest PE = 28.69/16.19 (DPS 0.17)

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